Case Law Details
Punjab Telenet Cables Limited Vs Commissioner of Central Excise (CESTAT Chandigarh)
CESTAT Chandigarh held that job worker is the one who works upon the goods supplied directly or indirectly by the principal manufacturer. In absence of the said supply, appellants do not fit into the definition of ‘job worker’. Hence, demand unsustainable.
Facts- The appellant are engaged in the manufacture of Plastic Furniture; they entered into an agreement for manufacture and sale of the products with M/s Nilkamal Limited on principal-to-principal basis; the appellants used the raw material purchased by them but conforming to the specifications given by the buyers and from the moulds supplied by the buyers; the appellants cleared the manufactured furniture to M/s Nilkamal Limited; the department was of the opinion that the appellants were job workers of M/s Nilkamal Limited as such they were required to pay duty on the sales price of M/s Nilkamal Limited at their depots.
Conclusion- The crux of the definition of job worker is in the use of inputs supplied by the principal manufacturer. It is a common understanding that a job worker is the one who works upon the goods supplied directly or indirectly by the principal manufacturer. This fact is totally missing in this case; neither from the terms of contract nor from the show cause notices, it is inferred that the goods are supplied by M/s Nilkamal Limited; therefore, the appellants do not fit into the definition of ‘job worker’ even for the purpose of Rule 10A. On this contest, we find that the demand is not sustainable.
FULL TEXT OF THE CESTAT CHANDIGARH ORDER
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